Promise Zones, a new initiative of the Obama administration, will align and maximize existing federal resources and attract private investment to help revitalize struggling, high-poverty communities. This initiative continues the administration’s efforts to increase coordination among federal agencies and eliminate barriers that discourage the efficient use of funding. The Promise Zones initiative is part of President Obama’s “Ladders of Opportunity” agenda, which will create a pathway to a decent living for hard-working Americans. As a part of the agenda, the Promise Zones initiative specifically addresses inequalities in high-poverty neighborhoods that impact residents’ life outcomes.

In a recent TED Talk, HUD Secretary Shaun Donovan stated that “the single biggest predictor of [children’s] life chances, even their lifespan, is the ZIP Code they grow up in.”1 The probability of experiencing negative health outcomes, such as type 2 diabetes, is increased in high-poverty areas, and the odds of positive educational outcomes, such as graduating high school, are decreased. According to Donovan, the effect of concentrated poverty on the life chances of resident children is “an economic calamity for our cities and our nation” not only because of the increased cost of healthcare and crime but also because of the “lost productivity and potential.”

Multiple government programs are currently at work in most high-poverty neighborhoods, addressing the issues of rampant crime, underperforming schools, and high unemployment, as well as helping residents to access necessary resources, such as housing, food, and education. In his speech, Donovan noted that the average child in a neighborhood of concentrated poverty is likely to participate in programs operated by 11 different federal agencies, including HUD and the U.S. Departments of Health and Human Services and Agriculture. “In the past, those agencies have tended to see the problems of poverty in a siloed, isolated way,” said Donovan; past approaches to affordable housing neglected to consider the vital amenities needed for healthy communities, such as access to grocery stores. Under the Promise Zones initiative, federal agencies will collaborate to make the most of existing federal investments and help communities leverage local assets, such as community-based organizations or nearby anchor institutions or central business districts.

The Promise Zones initiative will build on the success of the Neighborhood Revitalization Initiative, in which HUD and the U.S. Departments of Education and Justice coordinated funding and provided place-based grants to high-poverty areas. Communities selected to participate in the Promise Zones initiative (selection process is described below) will outline the community revitalization outcomes they are working toward, create a strategy to support those outcomes, and realign resources accordingly. Participating communities will not receive funding directly; instead, multiple federal government agencies will provide local leaders with specialized technical assistance, helping them navigate federal regulations and make the most of available funding. Communities designated as Promise Zones will also receive preference points and access to grantee networks for additional federal programs. In addition, a proposed tax credit for hiring and investing in Promise Zones is awaiting congressional approval.

Over the next 4 years, a competitive process will select 20 high-poverty urban, rural, and tribal communities to participate in the Promise Zones initiative, including up to 5 communities in calendar year 2013. Only communities that have received specified place-based grants will be eligible to apply for the first-round Promise Zones designation in 2013 because these communities have already proven capable of undertaking and expanding revitalization efforts. Experiences and outcomes from the partnership between the first-round communities and participating federal agencies will help improve the Promise Zones initiative in the future. To be eligible, an urban community must have a current Choice Neighborhoods implementation grant, a Promise Neighborhoods implementation grant, or a Byrne Criminal Justice Innovation grant. Eligible rural communities include those that have an active Promise Neighborhoods implementation grant or a Stronger Economies Together grant. And tribal communities must have an active Partnership for Sustainable Communities grant, a Stronger Economies Together grant, or a Rural Jobs Accelerator grant.

For tribal, rural, and urban Promise Zone designations, the overall poverty rate within the zone must exceed 20 percent and the population cannot exceed 200,000. Eligible lead applicants include local governments, recognized tribes, economic development corporations, public housing agencies, or nonprofit organizations, depending on urban, rural, or tribal designation. Applicants also need a commitment from local leadership of jurisdictions within the zone. Other regulations relating to the size and economic condition of proposed Promise Zones are also specified. A listing of communities eligible in 2013 is available here. All communities that meet the stated criteria will be able to apply for Promise Zone designations in 2014.

Evidence from communities throughout the United States indicates that the coordination of federal and other investments can successfully aid in improving school performance, reducing crime, attracting businesses, and providing mixed-income housing in close proximity to educational and commercial facilities. Expected outcomes of the Promise Zones initiative include increased economic activity, improved access to affordable housing, and reduced violent crime within the designated zone as well as enhanced educational opportunities for children and other community members. By fostering collaboration between multiple levels and agencies of government and encouraging private investment, the Promise Zones initiative will help meet the Obama administration’s goal of ensuring that a ZIP Code is not the sole determinant of a child’s life outcomes and that hardworking individuals throughout the United States are able to feel secure within their communities, obtain good jobs, and support their families.